Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> will be added to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng</a> at the close on 1 December taking the number of index constituents to 82.</li>
<li>Neither inclusion is a surprise. The non-inclusion of primary listed foreign companies is a bigger surprise - that could take place at the next rebalance.</li>
<li>Estimated one-way turnover is 3.53%, estimated one-way trade is HK$6.88bn (US$882m). Capping leads to buying in <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> and selling in <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a>. </li>
</ul>



Li Auto (2015 HK) and WuXi AppTec (2359 HK) will be added to the Hang Seng at the close on 1 December taking the number of index constituents to 82.
Neither inclusion is a surprise. The non-inclusion of primary listed foreign companies is a bigger surprise - that could take place at the next rebalance.
Estimated one-way turnover is 3.53%, estimated one-way trade is HK$6.88bn (US$882m). Capping leads to buying in Alibaba (9988 HK) and selling in Tencent (700 HK) and HSBC (5 HK). 


Hang Seng Index Rebalance: Li Auto (2015) & WuXi AppTec (2359) Added

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> is massively net cash. And it's ofloading <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a>. Though we don't know what the future holds, Pasona is the wrong price.</li>
<li>
<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> controlling shreholder announced it intends to increase it stake. And it's been in the market almost everry day since the interims. </li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway (576 HK)</a> announced its rights offering. It's at a long-term low price, and about to earn a long-term high net income, and have a long-term high payout ratio</li>
</ul>



Pasona Group (2168 JP) is massively net cash. And it's ofloading Benefit One Inc (2412 JP). Though we don't know what the future holds, Pasona is the wrong price.

ENN Energy (2688 HK) controlling shreholder announced it intends to increase it stake. And it's been in the market almost everry day since the interims. 

Zhejiang Expressway (576 HK) announced its rights offering. It's at a long-term low price, and about to earn a long-term high net income, and have a long-term high payout ratio


Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<ul>
<li>The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
<li>
Macro data points: Chinese industrial production and retail sales, Malaysia GDP growth.</li>
<li>
Companies mentioned:<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>
</li>
</ul>


The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.

Macro data points: Chinese industrial production and retail sales, Malaysia GDP growth.

Companies mentioned:Alibaba Group Holding (9988 HK), JD.com (9618 HK), Tencent (700 HK)



GEMWeekly (17 Nov 2023): China, Malaysia Macro; Alibaba, JD.com, Tencent

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>TME reported C3Q23 revenue, non-IFRS operating profit and IFRS net income inline, 12.9%, 2.3% vs. consensus. The bottom-line beat mainly due to the cost-effective operation and music subscription services.</li>
<li>We notice TME has become less reliable on live streaming and more on monetizing its user base through ARPU enhancement</li>
<li>We upgraded TME to BUY and raised the target price to US$ 9.7, implying a 21.1x PE ratio compared to its current trading at 17.8x in 2024.</li>
</ul>


TME reported C3Q23 revenue, non-IFRS operating profit and IFRS net income inline, 12.9%, 2.3% vs. consensus. The bottom-line beat mainly due to the cost-effective operation and music subscription services.
We notice TME has become less reliable on live streaming and more on monetizing its user base through ARPU enhancement
We upgraded TME to BUY and raised the target price to US$ 9.7, implying a 21.1x PE ratio compared to its current trading at 17.8x in 2024.


[Tencent Music (TME US, BUY, TP US$9.7) Rating Change]: Unique Content Unlocked Paying Potential

<ul>
<li>Tencent reported C3Q23 revenue, non-IFRS operating profit and IFRS net income (2.4%), 8.9% and 17% versus our estimates. The bottom-line beat was mainly due to the growth of high-margin businesses;  </li>
<li>We view commercialization of Video Accounts and expansion of overseas gaming are still at early stage.</li>
<li>Progression of these high-margin, high-quality business will persist into 2024;  We maintain BUY but raise target price to HK$ 432. </li>
</ul>


Tencent reported C3Q23 revenue, non-IFRS operating profit and IFRS net income (2.4%), 8.9% and 17% versus our estimates. The bottom-line beat was mainly due to the growth of high-margin businesses;  
We view commercialization of Video Accounts and expansion of overseas gaming are still at early stage.
Progression of these high-margin, high-quality business will persist into 2024;  We maintain BUY but raise target price to HK$ 432. 


[Tencent(700 HK, BUY, TP HK$432)Target Price Change]: More Sustained Growth Doesn’t Mean Slow Growth

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Hang Seng Index Rebalance: Li Auto (2015) & WuXi AppTec (2359) Added

Li Auto and WuXi AppTec will join the HSI at the close on 1 Dec. Non-inclusion of foreign companies is a surprise. Capping increases turnover and...

Brian Freitas

Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

GEMWeekly (17 Nov 2023): China, Malaysia Macro; Alibaba, JD.com, Tencent

The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of...

Wium Malan, CFA

[Tencent Music (TME US, BUY, TP US$9.7) Rating Change]: Unique Content Unlocked Paying Potential

TME's Q3 results beat expectations, driven by cost-effective operations and music subscriptions. The company is shifting focus to monetizing its...

Blue Lotus Research Institute

[Tencent(700 HK, BUY, TP HK$432)Target Price Change]: More Sustained Growth Doesn’t Mean Slow Growth

Tencent beats revenue and profit estimates, driven by high-margin businesses. Video Accounts and overseas gaming expansion still in early stages....

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hang Seng Index Rebalance: Li Auto (2015) & WuXi AppTec (2359) Added

Li Auto and WuXi AppTec will join the HSI at the close on 1 Dec. Non-inclusion of foreign companies is a surprise. Capping increases turnover and...

Brian Freitas

Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

GEMWeekly (17 Nov 2023): China, Malaysia Macro; Alibaba, JD.com, Tencent

The Global Emerging Markets Weekly provides a summary of the key news and related developments impacting the largest countries and constituents of...

Wium Malan, CFA

[Tencent Music (TME US, BUY, TP US$9.7) Rating Change]: Unique Content Unlocked Paying Potential

​TME's Q3 results beat expectations, driven by cost-effective operations and music subscriptions. The company is shifting focus to monetizing its...

Blue Lotus Research Institute

[Tencent(700 HK, BUY, TP HK$432)Target Price Change]: More Sustained Growth Doesn’t Mean Slow Growth

​Tencent beats revenue and profit estimates, driven by high-margin businesses. Video Accounts and overseas gaming expansion still in early stages....

Blue Lotus Research Institute

TME's Q3 results beat expectations, driven by cost-effective operations and music subscriptions. The company is shifting focus to monetizing its...

Tencent beats revenue and profit estimates, driven by high-margin businesses. Video Accounts and overseas gaming expansion still in early stages....